2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation  The Statements of Revenues and Certain Expenses (the Historical Summary) have been prepared for the
purpose of complying with the provisions of Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the SEC), which gives special instructions for real estate operations to be acquired. The Historical Summary includes the
historical revenues and certain expenses of the Hotel, exclusive of mortgage interest, interest income and depreciation and amortization, which may not be comparable to the corresponding amounts reflected in the future operations of the Hotel.

Revenue Recognition  Revenues from operations of
the hotels are recognized when the services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as telephone, rooftop leases and gift shop sales and rentals.

Use of Estimates  The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

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disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable  Bad debts are recorded under the specific identification method, whereby, uncollectible receivables are reserved for
when identified.